Off Label Changes Coming - Coalition for Healthcare Communication

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October 2011, Vol. 4, No. 10

Off
-
Label Changes Coming?
Sorrell

Ruling Prompts
New Legal Challenges


Pharmaceutical companies are unleashing fresh legal challenges to FDA’s
restrictions on off
-
label promotion, arguing that they contain the same
speaker
-

and content
-
based restrictions that were struck down by the
Supreme Court in the Vermont data mining ca
se
Sorrell vs. IMS Health.
The
courts appear willing to listen. Is an end to off
-
label prosecutions on the
horizon?


By Kate Rawson

In the sometimes hazy world of pharmaceutical marketing, industry has yearned for one thing:
definitive rules from the Food
& Drug Administration on off
-
label promotion.

Marketers have long complained about a lack of clarity from FDA on how to discuss unapproved
uses of prescription drugs and biologics without running afoul of the Department of Justice. A
statutory “safe harbo
r” for the dissemination of journal articles expired five years ago, and
companies say current FDA guidance doesn’t outline clear boundaries on acceptable ways to
provide information about unapproved uses

or offer protection from prosecution. (
See “
Off
-
Label Sales in Jeopardy
,” The RPM Report, December 2007.
)

Drug manufacturers now see an opening to revisit the issue in the aftermath of the Supreme
Court’s opinion in the Vermont data mining case
Sorrell vs. IMS Health
. In that case, the high
court struck down as unconstitutional Vermont’s attempts to place rest
rictions on the use of
physician prescribing data by pharmaceutical companies for marketing purposes. (
See “
Data
Mining Case Struck Down by Supreme Court
,” T
he RPM Report, July 2011.
)

The
Sorrell

majority opinion

immediately prompted questions from the legal community about
whether it made vulnerable certain FDA regulations, includi
ng the agency’s ban on most off
-
label promotion by pharmaceutical companies. Now, the appeal of a conviction of an Orphan
Medical (now
Jazz Pharmaceuticals
) sales representative, Alfred Caronia, may provide an early
test of whether off
-
label restrictions c
an withstand First Amendment scrutiny.

In
Caronia
, which is pending before the U.S. Court of Appeals for the Second Circuit, attorneys
for the former sales representative argue that FDA’s restrictions on off
-
label promotion are a
violation of the free spee
ch provisions of the Constitution. And they say that the restrictions
contain the same speaker
-

and content
-
based discrimination that was struck down by the
Supreme Court in
Sorrell

as unconstitutional.

Many legal experts agree. Richard Cooper, a former FD
A chief counsel and partner at
Williams
& Connolly
, told the Food & Drug Law Institute’s Advertising & Promotion Conference on
September 26 that like
Sorrell
, the off
-
label restrictions in
Caronia

apply only to a certain class
of speakers (manufacturers of

FDA
-
regulated products) and certain content (promotion of
unapproved uses). As a result, Cooper says,
Sorrell

“puts FDA’s ban on off
-
label promotion in
some jeopardy.”

Industry has also jumped into the fray. A coalition of 11 drug manufacturers filed an
a
micus

brief with the Second Circuit arguing that the court should overturn Caronia’s conviction,
because the FDA regulations on which it was based contain the same speaker
-

and content
-
based
restrictions that were struck down in
Sorrell
. And they argue tha
t existing FDA regulations lack
the “coherence and clarity” to provide manufacturers with the guidance they need on off
-
label
promotion.

The government dismisses that argument, saying in briefs to the Second Circuit that
Sorrell

has
no bearing on
Caronia
.
The off
-
label restrictions do not “tilt the playing field,” but rather ensure
that the public receive “reliable information” about drug and biologics. Furthermore, the
government says, FDA’s guidance document creates clearly defined safe harbors, and so lo
ng as
manufacturers stay within those established boundaries, there is no danger of prosecution.

But a First Amendment argument in
Caronia

may be heard by sympathetic ears. It was the
Second Circuit, after all, that reversed a lower court decision in
Sorre
ll

and deemed Vermont’s
data mining restrictions to be a violation of the First Amendment

a decision the Supreme Court
upheld. If the same logic can be applied to the
Caronia

case, major changes to off
-
label
promotion may be on the horizon.

Caronia:

A Rare

Off
-
Label Prosecution

The ink was barely dry on
Sorrell vs. IMS Health

before legal pundits starting speculating on the
implications of the majority opinion on FDA’s regulation of the pharmaceutical industry.

Now that the Supreme Court had deemed unconsti
tutional restrictions on the use of physician
prescribing data, what might that mean for direct
-
to
-
consumer advertising? Or FDA’s Risk
Evaluation & Mitigation Strategies? Or the federal anti
-
kickback statute? Or off
-
label
promotion? Could the same logic th
at guided the Supreme Court’s decision in
Sorrell

prompt
other First Amendment challenges? (
See “
Interpreting a Surprisingly Broad Decision
,” The
RPM Report,

July 2011.)

Indeed, Supreme Court Justice Stephen Breyer suggested that very possibility in his dissenting
opinion in
Sorrell
: “The same First Amendment standards that apply to Vermont here would
apply to similar regulatory actions taken by other States o
r by the Federal Government acting, for
example, through Food and Drug Administration regulation.” The majority opinion “opens a
Pandora’s Box of First Amendment challenges to many ordinary regulatory practices that may
only incidentally affect a commercia
l message.”

An early test of that theory is playing out in the U.S. Court of Appeals for the Second Circuit.
The court is considering the appeal of sales representative Alfred Caronia’s conviction for
conspiracy to misbrand the narcolepsy drug
Xyrem

(sodiu
m oxybate). A federal court convicted
Caronia in 2008 after rejecting a motion to dismiss the case on First Amendment grounds. (
See

The Super FDA: State Att
orneys General Flex Their Muscles
,” The RPM Report, February
2009.
)

Caronia’s prosecution was based on a sting operation during which Steven Charo, a government
informant, met with Caronia and an Orphan medical expert, Peter Gleason, to talk about
Xyrem
,
w
hich was approved only for
cataplexy

associated with
narcolepsy
. Charo asked a number of
questions about the off
-
label use for
excessive daytime sleepiness; at the time, the indication was
under review by FDA. The agency approved the excessive daytime sleepiness indication shortly
after the sting operation.

Caronia was convicted in federal court of conspiring to distribute
Xyrem

w
ithout adequate
directions of use

in essence, promoting the drug for the off
-
label indication of excessive
sleepiness. He was sentenced in 2008 to one
-
year probation, 100 hours of community service and
a $25 fine. According to “The Pink Sheet,” he is now t
rying to make a living as a carpenter. (
See
“Sales Rep’s Free Speech Challenge Of Off
-
Label Regs Boosted By Sorrell Ruling,” The Pink
Sheet,” September 5, 2011.
)

Caronia

was the rare case in which prosecutors not only went after the drug marketer for off
-
label promotion, but also charged the individual sales representative with a crime. For industry,
the case was an ominous indication of where the government might be taking off
-
label
prosecutions. Indeed, in a later case, two sales managers for
Pfizer Inc.
’s valdecoxib (
Bextra
)
were convicted for obstruction of justice in an off
-
label promotion investigation as part of a
record
-
breaking $2.3 billion settlement. (
See “Bextra Settlement Coming Soon: Industry Should
Brace For Impact,” The RPM Report, February
2009.
)

A New Off
-
Label Weapon?

After Caronia’s attorneys appealed his case to the Second Circuit, the court initially said it would
issue a decision without hearing oral arguments

an indication that it was prepared to uphold the
conviction. But then the co
urt reversed that decision, and scheduled oral arguments to further
examine both the constitutionality of FDA’s off
-
label restrictions, as well as questions about the
validity of the verdict sheet during the federal court trial.

Oral arguments, which were

heard on December 2, 2010, focused primarily on the
constitutionality question and appeared to play in Caronia’s favor. The appeals court judges
challenged the government on a number of points, including whether FDA is restricting speech
(the government s
ays no; the speech is merely evidence of intent to misbrand a drug), and
whether the agency could find less restrictive ways to achieve the same ends (such as putting
“timetables” on a manufacturer to seek approval).

Caronia

was still pending at the Second

Circuit when the Supreme Court issued the
Sorrell

opinion in June 2011, striking down Vermont’s data
-
mining restrictions as unconstitutional. In
light of that decision, the Second Circuit asked the parties involved in the
Caronia

case to submit
briefs on
the relevance of the Supreme Court’s opinion on
Sorrell
.

The appeals court request yielded
amicus

briefs from the usual suspects, like the
Washington
Legal Foundation
, which has been at the forefront of the off
-
label issue for years. But industry
also got
on board, with a brief from the
Medical Information Working Group
, a coalition of
11 drug manufacturers. (
See Exhibit 1.
) Both parties agree with attorneys for Caronia that
Sorrell

can be applied to FDA’s off
-
label promotion restrictions.


“Although they target a somewhat different subject matter, the FDA regulations at issue in this
case are not less speaker
-

and content
-
based than was the law at issue in
Sorrell
,” the Medical
Information Working Group’s brief states. “There is little quest
ion that the misbranding
provisions…impose substantial limitations on speech (i) by particular speakers (manufacturers)
and (ii) based on specific content (off
-
label uses of approved drugs and medical devices).”

The off
-
label restrictions restrict the spee
ch of manufacturers, while payors and other parties can
openly discuss unapproved uses, the coalition says. And the regulations are content
-
based in that
they “do not prohibit dissemination of truthful, non
-
misleading speech about on
-
label uses, but
do pro
hibit, in most circumstances, dissemination of information pertaining to off
-
label uses,
regardless of how medically accepted such uses are.”

“In sum, the FDA’s regulations censor manufacturers: A manufacturer that speaks about the
lawful off
-
label uses of

its products subjects itself to potential enforcement action unless FDA
and DOJ determine, in their sole discretion, that they will not treat the speech as evidence of an
‘intended use’ for the product.” This, MIWG says, creates a “chill on manufacturers’

speech,
which has serious potential consequences for physicians, patients, and the public health.”

The Government’s Response

The government doesn’t see it that way.
Sorrell

“does not affect the constitutionality of
Caronia’s conviction,” the government’s
brief to the Second Circuit states. The Supreme Court’s
decision to view the Vermont statute as a restriction on commercial speech (rather than
regulation of conduct) and apply “heightened judicial scrutiny” does not set new legal precedent,
the brief argu
es. “If the Court had actually meant to take such a drastic step, it surely would have
said so.”

But even if
Sorrell

did raise the judicial scrutiny for restrictions on commercial speech, it would
not affect
Caronia
, the government’s brief continues. “Caro
nia was not convicted for conspiring
to promote off
-
label uses of
Xyrem
, but instead for conspiring to distribute
Xyrem

without
adequate directions for use, and both the Second Circuit and the Supreme Court “have long
employed a more relaxed standard of ju
dicial review when the government requires disclosure of
commercial information.”

The government also dismisses the argument that the restrictions are speaker
-
based. “To the
extent that the Act’s misbranding provisions are effectively confined to manufactu
rers and others
involved in drug distribution, that practical incidence reflects the realities of drug marketing, not
a preference for one speaker over another. By their very nature, regulations of commercial
speech ordinarily and unavoidably apply to pers
ons engaged in particular commercial activity
rather than to the world at large.”

Similarly, the restrictions are not content
-
based, the government’s brief continues. When the law
“requires a drug manufacturer to provide adequate directions for the intende
d uses of its drugs, it
does so not because of official hostility to the manufacturer’s message, but simply to ensure that
physicians and patients receive the information they need to use the drug safely and effectively.”

The FD&C Act’s misbranding provisi
ons “are not designed to favor one side of a public debate
over the other side, but instead to provide the public with reliable information about the
medicines they are using, in much the same fashion that securities laws provide the public with
reliable i
nformation about the investments that they are making.”

“Unlike
Sorrell
, this is not a case in which the government is animated by ‘fear that people
would make bad decisions if given truthful information,’” the brief states. Rather, off
-
label
promotion “in
volves representations of safety and efficacy that are scientifically unproven and
potentially false, and physicians and patients who rely on those representations may do so to the
detriment of the patients’ health and even their lives.
Sorrell

casts no do
ubt on provisions that
protect the public from these harms.”

Speech or Conduct?

There are some important distinctions between
Sorrell

and
Caronia

that may yield a different
outcome in the Second Circuit. As the government points out in its brief, the Vermo
nt law was
designed to limit the promotion of brand
-
name drugs for approved uses.
Caronia
, in contrast,
involves the promotion of drugs for unapproved uses.

That distinction,
Wiley Rein LLC

partner Bert Rein said at the FDLI conference, means that a
rever
sal of
Caronia

is by no means a sure thing. “
Sorrell

comes up in a context where the
pharmaceutical detailing is assumed to be truthful, non
-
misleading promotion,” namely, the on
-
label sale of drugs, Rein says. “In that framework, the court was very sensit
ive to the state trying
to tip the balance of what it otherwise would allow to be a lawful consumer decision.”

With off
-
label use as seen in
Caronia
, the government’s rationale is somewhat different, he
continues. The government argues that the off
-
label
s
peech

itself is not the crime, but the
conduct

of introducing a misbranded drug. The government, Rein says, is arguing: “We’re not
punishing the speech, but we don’t want you to sell these drugs for which you have not provided
an adequate evidence for safe
ty and effectiveness.”

And that may well be a deciding factor in how the Second Circuit views
Caronia
. “It’s a real
conundrum,” Rein says. “If you treat it all as speech restriction, then suddenly it’s very
vulnerable. But if you start looking at, is the p
urpose here is to check the ideas or suppress an
activity which in the public health interest ought to be suppressed, you may come to a different
result.”

Cooper, the former FDA general counsel, agrees that the frame of reference matters, but thinks
the Co
urt will see it in free speech terms. “Perhaps the fundamental difference between the court
and the dissenters in
Sorrell

was on whether the Vermont statute should be viewed as a
restriction of speech, or merely as an incidental restriction in aid of gener
al economic
regulation,” he said. (
See “
A Case for Caronia
.”
)

“Arguably, the same issue would apply to off
-
label promotion, and presumably, the same 6
-
3
spli
t in the court would occur. FDA would argue that it is regulating conduct and regulating
shipment of interstate commerce, and not regulating speech.”

But, he says, the Supreme Court “didn’t accept that argument in
Sorrell
, and I think it’s doubtful
that t
he court would accept it in the context of off
-
label promotion.”

Incentivizing Supplemental NDAs

Cooper argues that the last defense that the government has in
Caronia

is the incentive that the
off
-
label restrictions creates for companies to gain FDA appro
val of new indications. It’s a
justifiable concern: Without restrictions on off
-
label promotion, the government fears that
manufacturers would skip the supplemental approval process altogether

resulting in far less
information about the safety and efficacy

of drugs for patients and physicians.

But Cooper argues that the incentive simply doesn’t work. “The relatively small number of
supplements that are submitted for additional uses, compared to the very large number of off
-
label uses that occur, suggest tha
t the incentive isn’t particularly successful,” he says. “Given the
volume of information about off
-
label uses that is available to speakers other than manufacturers,
it is not surprising that the incentive is relatively weak.”

Besides, Cooper says, while
the Supreme Court recognized in
Thompson vs. Western States

the
importance of preserving the integrity of FDA’s new drug approval process, the government can
reach that goal with less restrictive steps then a ban on off
-
label promotion.

The Washington Leg
al Foundation, in an
amicus

brief to the Second Circuit, agrees. The
government’s interest in “providing incentives to submit approved drugs to the FDA for new
uses is a legitimate one. But, as in Western States, the means of accomplishing that goal

regula
ting speech

is not narrowly tailored because that interest could be achieved by restricting
other conduct or far less speech than the current ban.”

The appeals court seemed to hear that message. During oral arguments, Justice Reena Raggi
pressed the govern
ment on that point, suggesting other ways that the off
-
label restrictions could
be more narrowly tailored, such as setting a timetable for approval of the supplemental
indication, or withdrawing the drug from the market if it is found to be unsafe. “The co
ncept of
precluding speech is one we look at with some concern,” Raggi said. “And so I’m not sure why
this can’t be much more narrowly tailored.”

In the case of
Caronia
, there was no need for an incentive for Orphan Medical to file a
supplemental application, since
Xyrem

was already under review for the use of excessive
sleepiness. The Washington Legal Foundation makes this point in its
amicus

brief: “The FDA
ban on speech about uses that are
already

going through the approval process if obviously
overbroad and gratuitous, because there is no need to give the manufacturer an ‘incentive’ to do
what it is already doing.”

“Clarity and Coherence”

I
n the absence of a court ruling striking down FDA’s restrictions on off
-
label promotion as
unconstitutional, the pharmaceutical industry might be satisfied with more clearly defined rules
about marketing drugs for unapproved uses. Industry has long complai
ned that the current
environment for pharmaceutical marketing is fraught with ambiguity, and leaves manufacturers
without the necessary guidelines to market their products without fear of prosecution.

Indeed, some in industry wonder whether this is an are
a where regulators are deliberately vague,
counting on uncertainty to do what regulation cannot: stop companies from making truthful
statements about their own products.

A provision of the FDA Modernization Act of 1997 allowed manufacturers to disseminate
peer
-
reviewed journal articles discussing off
-
label use of their medications, so long as the company
has plans to submit a supplemental application to FDA covering the use of the drug. But that
“safe harbor” expired on September 30, 2006, and while FDA iss
ued a
guidance document

on its
reprint policy in January 2009, companies have been left without statutory protection ever since.

Indeed, FDA guidance documents by de
finition “do not establish legally enforceable rights or
responsibilities” but instead “describe the Agency’s current thinking on a topic, and should be
viewed only as recommendations.” Those phrases, included in every FDA guidance document,
underscore the

fleeting protections that guidance documents afford manufacturers.
(See

Revisiting WLF: Rules for Off
-
Label Promotion Could Change with the New Commissioner
,”
The RPM Report, Novemb
er 2006
.)

In its brief to the Second Circuit on
Sorrell
’s significance in the
Caronia

case, the government
dismisses any concerns that FDA guidance documents are not binding on the agency and are not
embodied in formal rulemaking. “FDA and DOJ have
never

b
rought an enforcement action
against a manufacturer on the basis of conduct that conforms to the guidances,” the
government’s brief says. “The risk of liability for a manufacturer who engages in such conduct is
nil.”

Still, MIWG, the industry coalition, ar
gues that while the government has carved out exceptions
where it will not pursue prosecution, “rather than creating any true ‘safe harbors,’ those asserted
‘exceptions’ to the general rule that manufacturers are prohibited from engaging in off
-
label
speec
h are too narrow, too ambiguous, not rooted in and often inconsistent with the statutory
language of the FDCA, generally not the products of formal agency rulemaking, and in most
instance explicitly ‘non
-
binding.’”

For example, FDA’s guidance document on g
ood reprint practices allows that if a manufacturer
distributes a reprint of peer
-
reviewed journal article, the agency will not consider that action as
establishing intent to promote an unapproved use. Yet, the industry brief says, “if a scientist
working
for the manufacturer drafts and disseminates an entirely accurate summary of the
research on which that journal article was based, the manufacturer could be subject to
prosecution.”

The result, as the Washington Legal Foundation argues in its
amicus

brief
to the Second Circuit,
has been a contradictory off
-
label promotion policy. Physicians can prescribe medications for
unapproved uses for their patients

uses that are often paid for by the government through
Medicare. But they cannot discuss those uses with

other medical professionals (theoretically
more sophisticated than most patients) if they are on the payroll of the drug marketer

unless
they are answering a direct question about that use.

“That regulatory regime

which allows doctors to recommend that pa
tients use
Xyrem

for off
-
label uses but prohibits manufacturers from encouraging those recommendations

cannot
survive First Amendment scrutiny.”

The Citizen Petition Route

Manufacturers say it’s that sort of ambiguity that makes any off
-
label promotion tre
acherous.
Immediately after the
Sorrell

opinion, a group of seven manufacturers (
Allergan Inc.
,
Eli Lilly
& Co.
,
Johnson & Johnson
,
Novartis
,
Novo Nordisk
,
Pfizer Inc.
, and
Sanofi
) filed a citizen
petition with FDA asking for clarification on communication
s about unapproved uses. (
See

FDA Pressed To Clarify Permissible Formulary, Clinical Guideline Communications
,” The
Pink Sheet,” July 6, 2011.
)

The citizen petition asked for clarification on four areas: details on the standards

for providing
medical and clinical information on investigational products (often called “scientific exchange”);
sharing information with formulary committees and payers; providing independent third
-
party
clinical practice guidelines; and responding to un
solicited requests for information.

The “confusion” among those in industry with FDA’s policies in those areas “results in
significant difficulties for companies in their day
-
to
-
day decision
-
making,” the citizen petition
says. “That lack of clarity places
manufacturers at risk of criminal or civil sanctions if they
cannot correctly guess where the government would draw a line….Industry should not have to
refer to the terms of DOJ settlements or informal statements of FDA officials to learn what is
expected
of them.”

Whether industry will get greater clarity from FDA on off
-
label promotion is uncertain:
“Companies always do better with clarity,”
Pharmaceutical Research & Manufacturers of
America

General Counsel Diane Bieri said at the FDLI conference. “Whethe
r or not it’s possible
to get to the level of clarity that the companies are asking for, I’m not certain. But I think the
petition is a sincere attempt to try and get…a higher degree of clarity on some issues that have
troubled the industry for a number of

years.”

The Second Circuit may end the need for “clarity” from FDA on off
-
label promotion if it
reverses the
Caronia

conviction. Until a decision comes down

perhaps as soon as this year

industry should play by the same rulebook. “As a practical matter, I
don’t think that
Sorrell

changed the US Attorney’s world

certainly without further clarification from the courts,” Bieri
says.

John Kamp, a partner at Wiley Rein LLC, agrees. “This is an information policy debate and a
constitutional policy debate that is
fascinating and important, but the law didn’t change,” he told
the FDLI conference. The Department of Justice and the state AGs “are bringing those cases
under the same authority they brought before this case was decided. So don’t go home and say,
‘Oh, we
learned about the IMS case while we were at FDLI, and we don’t have to worry about
those rules anymore. Yes, you do.’”

The RPM Report

Comments? Email the author at
rpmreport@elsevier.com